Acct Exam 2

breach

when one party does not perform as promised in a contact

capacity

the ability to understand both the nature and consequences of one's actions

consideration

something of value given by both parties to contract that induces them to agree to exchange mutual performances

contract

a binding agreement between two or more parties

disaffirm

to revoke or deny a contract

express contract

a contract which specifically states all of its elements, either orally or in writing

implied in fact contract

a contract agreed upon by nonverbal conduct (actions) rather than explicit words

legality

The state of being in accordance with the law

mirror image rule

the requiremnt that a contract be accepted as is, without modification

mutual assent

An agreement by both parties to enter into a contract

Restatement of Contracts

A complications of the general principles of contract common law

Uniform Commercial Code UCC

A set of suggested laws concerning commerce with the intent to provide uniformity across states to simplify business activity

Valid Contract

a contract that complies with the four essentials of a contract and is binding and enforcable on all parties

copyright

The exclusive rights to reproduce, publish, sell or distribute the matter and form of an artistic effort

design patent

a patent that offers protection for the way a product looks

fair-use doctrine

permits limited use of copyrighted material without acquiring permission from the rights holder

infringe

to encroach upon in a way that violates the law or the rights of another

intellectual property

non-physical property that is the product of original thought and the law may protect

novelty, utility, non-obviousness

The three criteria that must be met to qualify for patent protection

misappropriation

The unauthorized use of another authors name, likeness, or identity without permission, resulting in harm to that entity

patent

An exclusive right granted by law to an inventor to make, use, and sell an invention for a limited period - 20 years from the date the patent application is filed

reverse engineering

The process of taking apart an object to see how it works and to duplicate the object. It is legal to acquire a trade secret using reverse engineering

trademarks

A distinctive mark or feature that is particularly characteristic of or identified with an entity, product, or brand

trade secrets

Any business information that is proprietary and gives the business a competitive advantages

utility patent

A patent that protects the way an invention is used an work

at will employment

the contractual employment relationship where the business can fire a worker without warning and justification

bona fide occupational qualification (BFOQ)

Employment qualifications that employers are allowed to consider while making decisions about hiring and retaining employees

business necessity

A legitimate business purpose that justifies an employment practice as valid and necessary for the business

disparate impact

A discriminatory employment practice that has a greater impact on one group over another

disparate treatment

A discriminatory employment practice where an employee is treated differently than other employees who were in a similar situation

hostile environment sexual harassment

Occurs when a supervisor or other employee makes sexually suggestive comments, gestures, advances, pictures, text, touch, or humor that unreasonably interferes with the work performance

quid pro quo sexual harassment

occurs when a more senior manager or employee demands sexual favors in exchange for some workplace benefit

sexual harassment

unwelcome sexaul advances, requests for favors, and other verbal or physical harassment of a sexual nature.

actual cause

refers to a cause or action without which the event could not have occured

assumption of risk

a defence in the law of torts that reduces a plaintiff’s right to recovery if the defendant can demonstrate that the plaintiff voluntarily and knowingly assumed the risks associated with the activity of issue

breach of duty

occurs when one person or company has a duty of care owed towards another person or company but fails to live up to that standard

deep pockets theory

In tort law, employers will often be held liable for the actions of a negligent employee. Since employers usually have more money than the employee to pay for negligence, they would be in a better position to pay the victims

defamation

Intentionally making untrue statements about an individual in the presence of another or communicating to a third party that has the effect of lessening the individual’s reputation in the community

design defect

A problem with the products design that makes the product inherently dangerous or useless, even if it is manufactured perfectly with the best quality materials

disparagement

Intentionally making false statements about the quality or ownership of someones goods

duty

a legal obligation that entails mandatory conduct or performance

express warranty

a verbal or written statement that guarantees that a product is of a certain quality or will work in a certain way or for a certain amount of time

failure to adequately package

relates to a duty the manufacturer has to package products appropriated and safely for the consumer

failure to adequately warn

A party will be held liable for injuries caused to another, where the party had the opportunity to warn of any dangers of the product but failed to do so.

implied warranty

A guarantee that an item sold is merchantable and fit for the purpose intended. An implied warranty is in addition to an express warranty provided at the time of sale to protect customers who might otherwise pay for products that are not as represented by the merchant

intentional tort

A civil wrong resulting from an intentional act of the defendant

manufacturing defect

a defect in a product resulting from a departure from its design specifications during production

negligence

Failure to use reasonable care, resulting in damage or injury to another. It has four key requirements

negligence action or personal injury

Harm done to a party through an unreasonable and foreseeable risky actions of the defendants

palming off

misrepresenting someone else’s goods or services as one’s own in business

product liability

The area of law in which manufacturers, distributors, suppliers, retailers and others who make the product available to the public are held responsible for the injuries those products cause

proximate cause

determining whether or not an event is sufficiently related to an injury to be held as the cause of injury

respondeat superior

a legal doctrine which states that an employer is responsible for the actions of employees performed within the course of their employment

strict liability

a legal doctrine that makes a person or company responsible for their action or products which causes damages regardless of any negligence or fault on their part

tort

a civil wrong which unfairly causes someone else to suffer loss or harm resulting in legal liability for the person who commits the wrongful act

tortfeasor

an individual who commits a wrongful act that injures another and for which the law provides a legal right to seek relief

vicarious liability

a legal doctrine that assigns liability for an injury to a person who did not cause the injury but who has a particular legal relationship (the employer-employee relationship) to the person who did act negligently

Administrative Procedures Act (APA)

a federal statute that governs how administrative agencies of the government of the United States may propose and establish regulation

administrative law judge

a judge who both presides and issues judgment over the claims and disputes involving administrative laws and agencies

due process of law

a fundamental, constitutional guarantee that proceedings will be fair, the government will notify affected parties of the proceedings, and the parties have the opportunity to be heard before the government acts to take away their rights

enabling statue

Congress delegates its rulemaking authority to agencies via enabling statutes. These statutes establish and authorize administrative agencies to issue specific rules and regulations and carry out other activities to fulfill broad aims defined by Congress

Federal Register

The official daily publication for rules and notices of federal agencies and organizations, as well as executive orders and other presidential documents

quasi-judicial authority

The powers granted to a public administrative agency to objectively determine facts and conclude them to provide the basis of an official action, often resembling the procedures of a court of law

quasi-legislative authority

When an administrative agency exercises its rulemaking authority, it acquires the power to make rules and regulations that affect legal rights through status. This authority is an exception to the general principle that laws affecting rights should be passed only by elected lawmakers

annual percentage rate (APR)

A nominal simple interest rate that banks are required by law to state on all loans

annual percentage yield (APY)

a nominal interest rate that reflects all the compound interest paid or earned in one year

basis point

a unit that is equal to 1/100t of 1%

certificate of deposit CD

a savings certificate issued by a bank entitles the holder to receive interest for a specified term

compound interest

interest earned on both the initial principal and the reinvested interest earned in prior periods

consistent

In TVM calculations, the periodic rate and the number of periods are both define dover ther same unit of time

continuously compounded interest

interest paid constantly, and immediately begins earning interest on itself

decimal form

Interest rates expressed as a percentage must be converted into decimal form when using mathematical formulas or an Excel Spreadsheet for TVM calculations. For example, twelve percent is 0.12 in decimal

discounting

determining the present value of an expected future cash flow using the discount rate

effective rate

A low-frequency rate that is equivalent to a high-frequency rate. For example, an effective annual rate of 12.682503% (low frequency) is the same as 1% per month (high-frequency)

future value (FV)

the value of a cash flow that occurs later than the present value

inflation

a general increase in prices and a fall in the purchasing power of money. For example, something that costs $1.00 today might cost $1.50 nexy year

interest on interest

the interest earned on prior interest payments becoming principal

internal rate of return (IRR)

The discount rate used in capital budgeting that makes the net present value of all cash flows from an investment equal to zero. The IRR is the rate of return you expect to receive if you put your money into a product

Internal Rate of Return Rule

A capital budgeting rule that accepts projects when the IRR is greater than the opportunity cost, rejects if less

Lump sum

a single amount of money at a particular time

net present value (NPV)

The difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of an investment or project

Net Present Value Rule

A capital budgeting rule that accepts all investments that are positive NPV because they create value and reject all prjects that are negative NPV becasue they destroy value

nominal interest rates

It is the % change in dollars per period. The nominal interest rate is approximately the desired real rate of return plus an adjustment for inflation